Thursday, 23 April 2015

1MDB by Dr M

Earlier today, addressing a group of investors gathered in Kuala Lumpur, Najib reportedly said that he doesn't feel lonely in telling the truth. I hope Najib gathers enough guts to now stand up and address the pertinent questions posed by Dr Mahathir on the missing BILLIONS of Ringgit of Government funds. Please read Dr M's list of questions again Mister Prime Minister (don't worry, the crooked bridge is certainly not in the list) before you make your next looney...I mean lonely statement. TQ

1MDB1. The management of Government finances is governed by laws, rules, regulations and practices. Companies also have similar systems but Government manages huge sums of money, basically the people’s money and it is imperative that the managers follow the laws, rules and regulations.

2. Corruption prevails in almost all Governments. But usually they involve relatively small sums. The work of auditors are supplemented by special anti-corruption authorities to ensure that as little as possible of Government money is misused, abused or basically stolen by the people authorised to manage it.

3. Governments can lose money through bad investments. We would know where the money is lost. But when huge sums of money disappear, then those entrusted with its management must answer for the disappearance. Disappearance is different from just losing. Disappearance is about money lost which cannot be traced. This can be because of corruption or theft.

4. In Malaysia the PM and DPM usually hold one extra portfolio. Usually the Ministry of Home Affairs and Ministry of Defence alternate between the two. Occasionally while waiting for suitable candidate, the Ministry of Finance is held by the PM. Dato Sri Najib however prefers to keep the Ministry of Finance under him all the time. He has appointed a second Minister of Finance. This is his prerogative of course, but he must ultimately be responsible for what happens to the country’s finances.

5. The first requisite for the management of Government money is the yearly budget. Prepared by the Ministry of Finance from feedbacks by all ministries and departments, the budget is first presented to the Cabinet. If passed it is then presented to Parliament.

6. Government is expected to spend money according to the budget. If the yearly budget cannot meet an urgent need of the Government, a supplementary budget can be presented by Cabinet to Parliament. Drafts of the budgets are prepared by officers of the Ministry. Government raises money through taxes and fees of all kinds. Government may own special businesses such as Petronas, which may contribute to the budget.

7. In Malaysia there is also off-budget-funds which may not be presented to Parliament but are still subject to scrutiny and approval of the Cabinet.

8. Cabinet papers are secret of course. But in the case of 1MDB the presentation to the Cabinet and approval by it seems to be unclear. There seems to be attempts to hide behind official secrecy.

9. What we do know is that 1MDB has as its advisor the Prime Minister and Minister of Finance. It is inexcusable that the management which is appointed by the PM would reject his advice. So like the British Advisor of old, the advice of the Advisor is a directive.

10. Since then three CEOs of 1MDB have resigned without explanation. Could it be because they could not accept the advice!

11. The Government invested one million Ringgit in the 1MDB. According to known records 1MDB then borrowed from various sources 42 billion Ringgit.

12. A company with 1 million Ringgit capital with no assets cannot borrow 42,000 times its capital with no collaterals. That 1MDB is able to do so is because of Government guarantees.

13. In other words it is Government which is borrowing the money. If 1MDB loses money, the Government will bear the loss. Yet the operation of 1MDB is not overseen by Government officers responsible for the management of Government funds.

14. Why has the 1MDB become controversial? What is wrong with 1MDB?

15. From the beginning it was wrong. It started off as an off-budget and it was not put before the Parliament.

16. The money was borrowed. So it is not sovereign wealth but sovereign debt.

17. The bond raised by Goldman Sachs costs more than is usual for Government borrowings. The interest rate at 5.9% was too high. Government loans usually attract about 3% or below.

18. In addition 10% commission went to Goldman Sachs which means that 1MDB gets only 90% of the money borrowed yet has to pay interest on 100%, raising the interest rate to 6.6%. Averaging at 6%, yearly interest on 42 billion Ringgit is about RM 2.5 billion. Since 2009 there has been no income from all the assets. And 1MDB had to borrow RM2 billion to pay the interest. The loan is now RM42 billion.

19. Total initial borrowings amounted to 42,000,000,000 (42 billion Ringgit). As far as can be ascertained the investments are as follows:

a. Purchase of Tanjong Energy (now known as Powertek Energy Sdn Bhd) from Ananda Krishnan for RM 8.5 billion. This is higher than market price. The licence was about to expire.

b. Purchase of Genting Sanyen Power (now known as Kuala Langat Power Plant) for RM 2.3 billion. Again high above market price. The licence was abut to expire.

c. Purchase of Jimah Energy for RM 1.2 billion.

d. Purchase of 70 acres of land in Jalan Tun Razak for RM320 million i.e: RM64.00 psf. Land last sold in the area was at RM7,000 psf.

e. Purchase of 495 acres of land in the former Sungai Besi TUDM airport (now known as Bandar Malaysia) about RM 363.5 million i.e: at RM 91.00 psf. Estimated value RM1,000 psf.

f. Purchase of 234 acres land in Air Itam in Penang RM 1.38 billion i.e: at RM135.00 psf.

20. It should be noted that TRX land is close to land recently sold at RM7000.00 psf. Assuming the market price is RM3000.00 psf the true value of this land is 6 billion Ringgit. The Government has therefore lost 5 billion plus because 1MDB paid only RM320 million.

21. With regard to the Sungai Besi Airport land, 1MDB paid 363.5 million Ringgit for 495 acres – i.e at RM91 psf. Assuming market price for this land is RM1000 psf. the Government lost approximately 20 billion Ringgit.

22. The land in Penang is of poor quality and has more than 1000 squatters. Yet 1MDB paid RM1.3 billion i.e at RM 135 psf.

23. These are all the purchases that are known. They all add up to RM14.7 billion. So there is approximately 27 billion Ringgit left.

24. More than 1billion US Dollars were said to be paid to Petro Saudi without verification as to the value of this company or its assets.

25. Where is the rest of the money?

26. A certain amount was registered in the Cayman Islands. What was the money used for? What was brought back to Malaysia. What was brought back and deposited in a Swiss bank in Singapore. Why? Where was the money brought back from? Why is this money not used to pay the RM 2 billion interest. Why did Bank Negara allow the first tranche to be repatriated to Malaysia and not the second tranche. Now the Swiss bank has told the Singapore authorities that the document did not originate from them and does not represent a true account of the assets of 1MDB. So where is the money said to be registered in the Cayman Islands and is now brought back.

27. Clearly 1MDB is not getting any return from its investments. Not only is it losing money but the Government has lost money when 1MDB paid only RM683 million for TRX and Sungai Besi. Total loss incurred by the Government is approximately 25 billion Ringgit.

28. 1MDB revalued all its assets at 52 billion Ringgit. That is because Government land was brought at far below the market price. It can only use this money to repay loans if it succeeds in selling them off as land or after development. Progress on TRX is very slow and there is no work on Sungai Besi land. No money will be generated during development; only outflows.

29. It is this disappearance of a huge amount of borrowed money by 1MDB and the inability to answer questions regarding what happened to the funds that disqualifies Najib from being Prime Minister of Malaysia.www.chedet.cc

27 comments:

Anonymous
said...

Thats not all what TDM has....i strongly believe he has more than that and I do not think najib will dare to respond in the light of latest development in status of documents issued by arul to singapore bank.

Najib and arul, this is one the crucial moves before it comes to the grand finale.....hidup rakyat

This is d 42 billion ringgit question that everyone wants answered. We don't really give a shit who is the PM but when money belonging to the public disappears or gets wasted, somebody shd be held accountable. While we are on the subject, the govt was also hoodwinked in the pkfz issue n how come no one was punished. Apparently it is very easy for public funds in this country to disappear. Hmm. I wonder who the culprit /s are.

Before those paid cybertroppers start to shoot back by singing the same old tune of the crooked bridge, then they should start it by providing answers to questions from no. 19 until 26. Do give details complete with names, numbers and figures. The rakyat are waiting.

Wow! There you go..I bet Tun M has more up his sleeve.. UMNO members should heed to this. There is no point talking about agama , bangsa and negara if you keep this kind of daylight robbery by your own elected leader under your nose.. PLS SPEAK UP UMNO MEMBERS!! This is not about NAJIB or TUNM anymore. This is about our money, rakyat's money being siphoned to wherever land of nowhere!! BANGUNLAH UMNO !!

Too complicated. Najib's media team would not understand so they will retort using something else. Najib also cant understand. I hope the good doc put an entry out in Malay. Jom kita tngk tv3 ramai2 malam ni

Apanama, read this extract from MI:Sarawak Report said a senior figure at BSI Bank Singapore was suspended last month, apparently due to the investigation on 1MDB, and questioned the lack of reaction by the Malaysian side, despite Singapore's monetary authorities having already given the information to Malaysia.

The website also said it learnt that Prime Minister Datuk Seri Najib Razak and his wife Datin Seri Rosmah Mansor had met Low in Istanbul recently, during a stopover on their way to Kazakhstan. – April 23, 2015. -

See more at: http://www.themalaysianinsider.com/malaysia/article/over-rm1.8-billion-moved-from-a-jho-low-bank-account-to-another-says-sarawa#sthash.WNAiy02E.dpuf

Next few weeks, if umno veterans and existing senior leaders, wanita, pemuda and puteri made calls for najib to respond ti tdm's "allegations" only then we see more positive development followed by motion of no confidence vote in parliament.

1.yes2. yes3.yes4.yes5.yes6. yes7. agree8. If not approved,then questions should have been raised by the Cabinet.9.Well, clearly these roles violate all principles of control. What objectivity if one personis in charge. 10. they may have had some concerns, though I cannot say for the better or worse.11-13 Clearly off-budget operations which in private sector would have resulted in sacking of general managers and criminal proceedings.14- 29 Clearly it was designed to bypass government oversight; it's not incompetence or sleeping on the job but completely devoid of any public interest. In your (Dr Mahathir's) case public interests was dominant, surpassing all others.

Opulence has dulled our morals and I fear those greedy for quick money and power on both sides will join hands and take us to the pits forever before we get a shot at world-class governance again.